Binding Financial Agreements18 February 2022 in Family and Divorce Law
What are Binding Financial Agreements
Binding financial agreements allow parties to pre-determine financial and property issues that can arise following the breakdown of a relationship. For example, these agreements can determine how property will be divided between the parties following a relationship breakdown and determine the extent of spousal maintenance that will be paid. These types of agreements are also commonly known and referred to as ‘prenups’.
Binding financial agreements can be entered into before, during or after the breakdown of a marriage or de facto relationship. These agreements can provide peace of mind to the parties of the agreement and provide a way to avoid the cost, stress and time associated with resolving financial matters with a former partner in court.
Binding financial agreements must be in writing, signed by both parties and must express that the agreement is being made under the relevant section of the Family Law Act 1975 (Cth). In addition, there are limits as to the number of binding financial agreements a person can be party to. Further, both parties must obtain independent legal advice and obtain proof that they have received such independent advice.
It is important to appreciate that there are different provisions in the Family Law Act that apply to married as opposed to de facto binding financial agreements.
Do you need a Binding Financial Agreement?
There are numerous reasons for entering into a binding financial agreement with your partner. The suitability for you will depend on your unique circumstances. Some reasons why parties may want to consider entering into a binding financial agreement include
- Where one party has substantial assets which they wish to protect.
- Where the parties want to avoid the stress, costs and emotional strain that can be associated with financial issues following the breakdown of a relationship.
- Where a party to the agreement wants to protect the financial interests of relevant companies and trusts.
Ultimately, whether you need a binding financial agreement will largely depend on the unique circumstances of you and your partner’s relationship.
How can a Family Lawyer help me with Binding Financial Agreements?
A family lawyer can assist you with drafting a binding financial agreement that is comprehensive, legally effective and properly reflects your intentions. This is particularly important as binding financial agreements are legally required to be in writing. An experienced lawyer can assist you by reviewing a binding financial agreement and explaining the rights and obligations it creates. It is important to seek this advice prior to signing, as once signed you are bound by the terms of the binding financial agreement terms. It is imperative that both parties to the agreement obtain legal advice before signing so that the agreement is enforceable. The family lawyers at Brander Smith McKnight can assist in negotiating the terms of a financial binding agreement so that you are protected against onerous terms.
Setting Aside a Binding Financial Agreement
In simple terms, there are a number of circumstances where an agreement can be set aside.
- If the agreement was obtained by fraud.
- If the agreement was entered into for the purpose of defrauding or defeating a creditor.
- If the agreement is void, voidable or unenforceable.
- If a party to the agreement engaged in unconscionable conduct in relation to the making of it.
- Since the making of the agreement, there has been a material change in circumstances relating to children of the relationship.
The lawyers at Brander Smith McKnight can help you terminate a binding financial agreement. This can be achieved either by an agreement or by a court order.
The highly experienced family lawyers at Brander Smith McKnight can also provide valuable legal advice relating to other areas of family law, for instance property settlement, parenting orders and spousal maintenance. Obtaining this advice can help you make an informed decision regarding binding financial agreements.
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